April 2007                 DNJournal.com               The Domain Industry News Magazine

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Two Sides of the Typosquatting Coin

As many have been predicting for months now, the typosquatting issue has moved to center stage in the domain business. Typosquatting is the practice of registering domain names that are misspellings of popular brand names. Those names are then used to generate pay per click revenue from web surfers who accidentally mistype a domain name and end up on an advertising page owned by the typosquatter. Practitioners of this black art have made a lot of money over the years, but in 2007 holding infringing names may well earn you an expensive day in court rather than a fat PPC check.

Corporations have started filing lawsuits left and right against companies and individuals that they allege are guilty of trademark infringement. Verizon has sued major portfolio owner iREIT, Nieman Marcus, after already suing and settling with Dotster.com, has sued Name.com and Microsoft has filed multiple lawsuits against alleged typosquatters. Penalties already on the books make it possible for the companies whose marks are found to have been violated to collect as much as $100,000 per infringement. In addition to subjecting themselves to potentially backbreaking financial liabilities, those who are knowingly engaged in typosquatting  are creating a lot of undeserved heat for owners of generic domain names.

Just this week (on Thursday, April 26), the Information Technology Association of America (ITAA) held a briefing in Washington, D.C. titled "Internet Click Fraud Tricks: Domain Name Tasting, Joy Riding, Parking, Kiting and Other Dirty Tricks". You read that right. They erroneously labeled the perfectly legitimate practice of parking domains as a "dirty trick". Unfortunately, many people in the audience and lawmakers on Capitol Hill will assume those speaking at the briefing knew what they were talking about and will tar generic domain owners with the same brush they use on typosquatters.

Verizon attorney Sarah Deutsch spoke at the briefing and while she made several valid points, there were also a number of obvious factual errors in her presentation. The Internet Commerce Association's Legal Counsel and Washington lobbyist, Phil Corwin, was in the audience and he challenged some of the incorrect assertions that were being made. Ms. Deutsch attempted to deflect Corwin's valid observations by bringing up Verizon's lawsuit against iREIT, who is an ICA member. How that suit will be resolved remains to be seen, but the filing of a lawsuit against anyone does not make false allegations about generic domain monetization activities, such as domain parking, acceptable. 

Verizon has been sued (and lost) many times because of their own business practices. They had to pay WorldCom $169 million in 2003 and last year they were sued by two public interest attorneys for $5 billion for alleged wholesale violations of privacy laws. It is a fact of business life that many companies have been sued, lost suits and paid the price. The fact that Verizon was one of them does not mean they are not entitled to vigorously protect their trademarks - they are. But they are not entitled to make spurious claims about innocent parties accusing them of being involved in click fraud, dirty tricks, etc.

Our headline mentioned "two sides" of the typosquatting coin. While there are people in the domain business who are rightfully being called out for infringing activity, there are also corporations that are making blatant attempts to steal generic domain names through reverse hijacking attempts. One of the most egregious attempted thefts to date just came to light this week in a Boston Business Journal article where it was revealed that Italy's Pirelli Tire Company is trying to take the clearly generic domain Zero.us away from the legitimate owner Christian Zouzas.

In their WIPO complaint Pirelli, who makes a tire called the PZero, makes this astonishingly absurd assertion: "there is no reasonable possibility that the domain name was selected by (the) respondent for any purpose other than a brazen attempt to create a likelihood of confusion with (the) complainant's mark as to the source, sponsorship, affiliation, or endorsement of respondent's Web site." Zouzas is not using the penultimate generic term "Zero" in any way related to tires. It seems inconceivable that the panel will not rule in his favor and in the decision Pirelli should clearly be labeled guilty of a reverse hijacking attempt. 

WIPO panel should deflate 
Pirelli's bogus claim to Zero.us

Now, because Pirelli will stoop to these kinds of tactics, shall we brand all trademark holders as morally bankrupt entities that will steal any asset they can as long as they can get away with it by virtue of having a larger bankroll than their intended victim? Of course not. Neither should trademark owners attempt to mislabel the entire domain investment community (as they did this week) because of the actions of a few. We will grant that the domain industry has some cleaning up to do, which should include drafting and adoption of a best practices code of conduct that professionals can be encouraged to adhere to. At the same time, it should be recognized and publicized when trademark holders reach far beyond the boundaries their marks are restricted to as Pirelli is currently doing. 

As knowledge of the inherent value of good domain names continues to increase, we will see more and more skirmishes like this as there will always be some people on both sides (trademark owners and  domain owners) who will act less than honorably. This industry, like all others, is a microcosm of society at large. But the sword cuts both ways, so it is important that the domain community be vigilant and proactive in encouraging policy and law makers to strike a fair balance when dealing with these issues. 

ICANN Finally Gets the Go Ahead to Send Registerfly to the Gallows

On Thursday (April 26), U.S. Federal Court Judge Manuel J. Real issued a preliminary injunction clearing the way for ICANN to revoke renegade registrar Registerfly.com's accreditation to sell domain names. Real also ordered Registerfly to give
ICANN current and accurate data for all of RegisterFly’s domain names (something Registerfly failed to provide despite being directed to do so April 16 when the court issued a temporary restraining order against them). 

ICANN has invited accredited registrars to submit "statements of interest" starting Monday (April 30) to act as a transfer provider, so Registerfly customers can gain access to their domains. The registrar handling the transfers will temporarily hold the names and help registrants transfer to any ICANN accredited registrar of their choice. Unfortunately is is believed that thousands of domains have already been lost during the meltdown at Registerfly and that inaccurate registration records there may make it impossible to identify the owners of thousands more. 

This is the first time ICANN has ever used the "nuclear option" against a registrar but certainly none has deserved it more than Registerfly. Their actions have made them, as well as ICANN and eNom (for whom Registerfly was once a reseller) targets of a class action law suit that already has registered hundreds of claimants. 

Amsterdam Ready to Welcome Domain Investors

Domain owners from across Europe have their sights set on Amsterdam, Holland where DomainSponsor will be hosting a regional Domainfest event May 16-17 at the Amsterdam Hilton. You can bet several people from this side of the pond and other points around the globe will ignore the regional label and turn up as well. That's what happens when you have the kind of reputation DomainSponsor has for showing people a good time! 

The two day event will feature multiple seminars, networking sessions and another DomainSponsor Party that is sure to be a memorable affair. A $395 early bird registration rate is good until May 1 when the price will go up by $100. Full details about the conference are available on the Domainfest.com website. 

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Ron Jackson

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